Belfast Telegraph

Greece bailout delayed by German uncertainty

By PA Reporter

Greece faces further hurdles and delays before it gets its second €130bn (£109bn) bailout in spite of parliament agreeing further cuts in the face of violent protests.

The EU called the approval a "crucial step forward" but added it would take some time before the second bailout is delivered.

Germany's finance ministry said it will not give its final approval for the new aid payments until early March - after there is clarity on how well a debt relief deal with private bond holders would work and its parliament has voted on the new measures.

Pushing the new bailout back for several weeks underlines how much distrust has built up against Greece over the past two years, when many promised cuts and reforms were passed but never actually implemented.

But it means that Greece, its citizens and the rest of the world economy will not know for several weeks if the country can avoid a potentially disastrous default.

Greece's political leaders struggled over the weekend to get new far-reaching austerity measures through parliament ahead of a meeting of the finance ministers from the 17 euro countries on Wednesday. The drastic cuts debated on Sunday included axeing one in five civil service jobs over the next three years and slashing the minimum wage by a fifth.

As Greek MPs voted on the new cuts, the streets of Athens and other cities were rocked by violent protests. In Athens, at least 45 buildings were burned while dozens of stores and cafes were smashed and looted.

Police arrested at least 74 people and detained a further 92.

The new rescue loans are needed to prevent the country from a potentially catastrophic default next month - a bankruptcy that could push Greece out of the euro currency union, drag down other troubled eurozone countries and further disturb global markets.

However, the Greek Parliament's vote has not brought an end to the uncertainty. Apart from some technical decisions, several key issues remain such as whether the new spending cuts, the debt relief deal and the new bailout will be enough to bring Greece's debt load down to 120% of economic output by 2020 - the maximum its international creditors perceive as sustainable.